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Why Did Facebook Pay $1 Billion To Buy Instagram?

In what I've read re; Facebook 'shelling out' $1 Billion for Instagram, I feel that the SmartMoney blog came closest to the real reason. -- As, with Instagram, Facebook now Gets the 'Holy Grail' of Data - that they've pointed out there in the above headline, of their story.

It now seals Facebook's mobile platform, as complete.

In that (in fact).."Experts say it may be all about location, location, .- Snap a digital photo, and the file typically includes -- embedded information on where and when it was taken."

Now try to think of the scope this will provide for Facebook Ads. - And for all marketers diving into Facebook's (soon to be), Billion users. In what is a reality of spending just one dollar per user for this acquisition.

Om Malik in his GigaOM's Here is why Facebook bought Instagram reasoning, talks everything nice of Instagram but like SmartMoney, there's little to no mention on what's in store with advertising.

Facebook sell Ads. They also have buyers coming in to target all it's users. Facebook has the 'best of both worlds', @ scale. And has 'reach' across the entire web. Om Malik had previously said, when Instagram launched the Android app:

......"It is pretty clear that thanks to the turbo-charge effect of Android, Instagram's user base is going to blast past the 50 million mark in a couple of weeks."

Targeting "intent" Users, back and forth. (Globally)

So users can now be 'reached' more precisely (targeted) on a fixed basis or, whenever they are 'on the road'. Picture (imagine), around lunch time - - anywhere in the world and self service Ads from restauranteurs, food outlets etc all flashing their lunch 'specials' across the tiny screens of those 'in market' (yes, they're hungry, ok?) users. Or, others shopping for 'goods and services' (using search) getting 'special deals' in RT type Ads- flashed to them, from 'local' advertisers. (In the vicinity, of them & for facebook advertisers - 'fixed' or, mobile.)

It's now endless as to what options Facebook can provide for advertisers both 'in house' or, from partners - who will bring in advertisers targeting 'intent' and in turn, FB'll find that they'll be bidding against it's very own advertisers for that (each single), impression, in Facebook's own vibrant auction. Again, this is for both 'fixed' and or, mobile, too. How sweet!!

An exclusive CPA/CPV global marketplace sounds better by the day!

Only my opinion, as always.

LOOK: Market Cap $17.98M - Cash end of Q4 - 2011 $24.8 million.

$1.04 Down 0.04 (-3.70%) Yes ..... Go Figure!


Disclosure: Long LOOK


With Instagram, Facebook Gets 'Holy Grail' of Data